Fight between local and global CROs intensifies

The pharmaceutical industry is constantly seeking new ways to drive down drug development costs. There appears to be opportunities for local CROs in Asia to grow, while the market is sensitive to price. The local CROs are able to provide a more cost-competitive option to compare with global CROs.

However, they must continue to distinguish themselves as leaders in their areas of specialty through high quality services. As the desire to expand outside their own country of origin grows, more and more emphasis will be placed on the ability of CROs to perform regional studies and ultimately studies that fit the requirements for global drug registration. This will require local CROs to expand their geographic reach or form alliances with the larger regional or global suppliers

More and more global CROs have already formed regional alliance with local CROs to strengthen their capabilities and presence in the countries. In addition, we believe that local CROs bring a real benefit to global CROs, with local knowledge of the market that can be invaluable. For example, local industry experts who have extensive relations with the Chinese SFDA and other local regulatory bodies are helpful in managing clinical trials in a more effective and efficient manner.

It is likely that these alliances, while beneficial to both parties in the short term, will form the basis for future mergers and acquisitions in order to meet the growing client needs for local know-how and global reach. However, there will always be a need for some niche providers who specialize in executing local registration studies in a very cost-effective manner.